settled to what might be considered a more normal level with work being let on a regular schedule and contractors having to compete for it â a plausible explanation for the slight shift in profit margins away from the top end and toward the middle range. Last year 77% of contractors reported margins greater than 10%; that number has declined to 69% this year with the accompanying shift toward the 5-10% profit margin range. And while that could be a result of the pent-up demand dissipating, it could also reflect the fact that by expanding the list we have included smaller contractors who might be working on slimmer margins. Diversification. As in yearsâ past the lists reinforce the diversification of the industry: ⢠4 of the Striping 75 perform only pavement marking work; 3 generate 90% or more from pavement marking ⢠1 of the Paving 75 performs only paving and 3 companies generate 90% of sales from paving ⢠None of the Sealcoating 75 perform
only sealcoating and only 2 companies generate 90% or more from sealcoating ⢠None of the Paving Repair 75 perform only repair and none even come close to 100% Number of Jobs. Contractors generally have to juggle their schedule, as indicated by their responses to a question of how many jobs they complete each year. Just over two-thirds (68%) complete more than 200 jobs, with 42% completing more than 400 jobs. Almost one-third (32%) perform fewer than 150 jobs. ⢠9% perform less than 100 jobs ⢠13% perform between 101-150 jobs ⢠10% perform between 151-200 jobs ⢠17% perform 201-300 jobs ⢠9% perform 301-400 jobs ⢠42% perform more than 400 jobs Number of Customers. But the number of customers contractor perform those job for indicates they often obtain multiple projects from the same customer. A little over half (55%) work for fewer than 200 customers,
while 28% work for more than 400 customers ⢠30% work for fewer than 100 customers ⢠11% work for between 101-150 customers ⢠14% work for 151-200 customers ⢠10% work for 201-300 customers ⢠7% work for 301-400 customers ⢠28% work for more than 400 customers Replacement Value of Equipment. While the pavement maintenance business has been viewed as an industry with a low-cost barrier to entry, the contractors that make up these lists have formidable fleets. While almost one-quarter (24%) could replace their fleet for less than $500,000, it would cost more than $1 million for 63% of contractors â 42% of whom would have to spend more than $2 million. ⢠12% less than $250,000 ⢠12% $250,000-$500,000 ⢠13% $500,000-$1 million ⢠21% $1 million-$2 million ⢠42% More than $2 million
www.ForConstructionPros.com/Pavement ⢠PAVEMENT ⢠June/July 2018ââ13
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